Budget 2014, what does it mean for the I.T industry?

Friday 21 March 2014

So, that time has come around again here in the U.K, when our Chancellor of the Exchequer George Osborne delivers the nation’s budget for the next year. This has an effect on our everyday lives in a variety of ways depending on one’s circumstance (Bingo anyone?!) After the budget was announced I was doing the usual internet research to see the proposals that had been put forward and thought it may be interesting to review the effects this budget may have on SME’s like Connexica and on the I.T industry as a whole.

One potential boost to the industry is with the aid of a tax relief on investment in machinery. It has not yet been made clear whether I.T spend falls into this category but according to an article on the Computer Weekly website, it may mean tax breaks for smaller firms investing in I.T spending. These businesses will be able to implement I.T at a lower cost and can reap the benefits from investing in business enhancing products such as Business Intelligence solutions.

Another promising suggestion is the government’s plan to take control of energy costs not only for individuals, but also for tech companies who have higher energy costs. Some of those businesses that would benefit from this change are Data Centres, where there is a constant use of electricity which means higher spend on energy and therefore less investment and development.

Sticking with the subject of Data, there will also be £42 million of funding provided to a national institute who specialise in one of our favourite topics, Big Data. The money will go towards new research and ways of collecting, organising and analysing large sets of data – great news for those of us who specialise in helping businesses with all that lovely data.

International growth is a major part of our development here at Connexica as we recruit more partners and customers around the world. Interestingly, the Government have pledged to double the amount they provide for export finance, making the new figure £3 Billion and also slashing the interest charged on international exports.

Finally, what are the implications of the budget for SME’S? The budget has proposed a tax credit rise from 11% to 14.5% for Research and Development. This is especially beneficial to many SME’s who make a loss in their early years of business and let’s be honest, better research and development = better businesses and a stronger economy.

No budget will ever be perfect or please everyone; we have a long way to go before our economy recovers, however so far, these appear to be positive steps in the right direction to enhance an exciting and innovative industry and the businesses that form it.